MediavataarMe News Desk

Korn Ferry 2019 Salary Forecast Shows Smaller Real-Wage Increases Across Most Parts of the World

Adjusted for Inflation, Real Wages Up Only an Average of 1 Percent Globally

A forecast issued today by Korn Ferry (NYSE: KFY) reveals that, adjusted for inflation, real-wage salaries globally are expected to grow only an average of 1.0 percent in 2019. This is down from a 1.5 percent prediction for 2018.

“With inflation rising in most parts of the world, we’re seeing a cut in real-wage increases across the globe,” said Bob Wesselkamper, Korn Ferry Gal lobHead of Rewards and Benefits Solutions. “The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real pay growth they did even one year ago.”

Middle East Sees Second-Lowest Real Salary Increase

In the Middle East, wages are expected to increase by 3.6 percent, compared to 3.8 percent last year. Inflation-adjusted wage increases are predicted to be 0.4 percent, compared to 0.9 percent last year and 2.5 percent the year before.

Things are looking better in the UAE, Saudi Arabia and Kuwait this year:

• In the UAE, an inflation rate of 3.2 percent combined with pay increases of 3.9 percent means that real wages are expected to increase by 0.7 percent. Last year real wages were predicted to fall by -0.5 percent.

• Saudi Arabia is expected to see the highest real salary increase in 2019. With the inflation rate anticipated to increase by 2.3 percent and salaries expected to rise at a rate of 4.9 percent, the real salary increase is forecasted at 2.6 percent. That’s significantly greater than the 0.1 percent increase forecasted for 2018.

• Kuwait ranks second in the region in projected average real salary increase, coming in at 2.2 percent. That’s based on an inflation rate forecast at 1.6% and expected salary increase of 3.8%.

Qatar and Lebanon are both predicted to see a drop in real wages, with Qatar forecast to have a -0.5 percent loss in real wages, and Lebanon to have a -1.7 loss in real wages. This is compared to 1.8 percent growth in Lebanon last year and a 6.1 percent growth the year before.

“Whilst the Middle East continues to face a similar inflationary pressure as we are seeing across the globe, key financial centres should see improved performance in 2019. Saudi Arabia and Kuwait are expected to outpace the region in terms of real salary increases, with both showing significant year-on-year increases,” said Vijay Gandhi, Regional Director – Europe, Middle East & Africa, Korn Ferry Products.

“The UAE continues to position itself as a highly attractive workplace destination in the region. Average real salary increases are projected to move back to a positive level after being in negative figures in 2018. At the same time, inflation has halved in the last 12 months and the cost of living is declining, resulting in greater disposable income for workers at all levels,” Gandhi added.

Highest real wage growth in Asia

In Asia, salaries are forecast to increase by 5.6 percent, up from 5.4 percent last year. Inflation-adjusted real wage increases are expected to be 2.6 percent, the highest globally, but down from 2.8 percent last year.

China’s real-wage forecasted growth for 2019 weakened at 3.2 percent, down from 4.2 percent last year. Japan saw a real-wage prediction of 0.1 percent for 2019 compared to the 2018 prediction of 1.6 percent. Asian countries that saw year-over-year increases include Vietnam’s forecast of 4.8 percent, up from 4.6 percent last year, and Singapore‘s forecast of 3.0 percent, up from 2.3 percent last year.

Eastern Europe Faring Better than Western Europe

According to the Korn Ferry forecast, employees in Eastern Europe are set to see an average salary increase of 6.6 percent in 2019. After taking inflation into account, real wages are forecast to rise by 2.0 percent, which is up from 1.4 percent last year. In Western Europe, workers are expected to see lower wage increases, with an average increase of 2.5 percent, and inflation-adjusted real wage increases of 0.7 percent. This is down from the predicted 0.9 percent real-wage growth of last year.

Wages are predicted to increase 2.5 percent in the United Kingdom. Combined with a 1.9 percent inflation rate, real wages are expected to increase by 0.6 percent. This is up more than a percentage point from 2018, when wages were predicted to decrease by -0.5 percent. Employees in two of Europe’s largest economies, France and Germany, are forecast to see real-wage rises of 0.5 percent and 1.0 percent respectively.

North America Lagging

In North America, the average salary growth is predicted to be 2.8 percent in 2019, and when adjusted for inflation, the real-wage growth is expected to be 0.6 percent.

In the United States, an average 3 percent pay increase is predicted, which is the same as last year and the year before. Adjusted for the expected 2.4 percent inflation rate in 2019, the real wage increase is forecast to be 0.6 percent, down from last year’s 1.0 percent. Canadian workers will see salaries increase by 2.6 percent, and with inflation at 2.0 percent, will also experience real-wage growth of 0.6 percent.

Inflation Tempers Salary Growth in Africa

Although top-line salaries will increase by 7.7 percent in Africa, high inflation means the real increase is predicted to be only 0.9 percent. In Egypt, salaries are expected to increase by 15 percent, but a 14.4 percent inflation rate means employees will only see a 0.6 percent real-wage increase.

Latin America Sees Year-Over-Year Drop in Real Wage Growth

Employees in Latin America are forecast to see a 4.6 percent gain in wages. With inflation, the real-wage increase in the region is expected to be 1.3 percent. This is down from 2.1 percent real-wage growth predictions from last year.

In Colombia, inflation is expected to be 2.9 percent for 2019. With a salary increase projected at 5.0 percent, this puts real wages for Colombia up 2.1 percent. In Brazil, the expected salary increase is 4.2 percent, and with 4.3 percent inflation, workers are expected to see a -0.1 percent decrease in real wages.

The Pacific Sees the Lowest Real Salary Increase

Wages in the Pacific are forecast to grow by 2.5 percent, and adjusted for inflation, the rise in real wages is predicted to be 0.3 percent. Australia will see a 2.5 percent top-line growth, a 2.3 percent inflation rate, and a 0.2 percent real wage increase. In New Zealand, a 2.5 percent salary increase is forecast, and with 2.2 percent inflation, is expected to see a 0.3 percent real salary increase.

“While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions,” said Benjamin Frost, Korn Ferry’s Global General Manager – Pay. “Compensation programs need to be regularly reviewed to make sure they align with changing business and market conditions.”

New Services, Acquisitions Disrupt as well as Evolve the Smart Home Market

Strategy Analytics’ smart home analysts have made their predictions for the smart home market in 2019, and they foresee even more potent pushes from big consumer technology brands into the smart home market, and a stronger emphasis across the board on services versus hardware.

New roads into existing markets, whether through hardware-as-a-service sales models or smart home service providers partnering with insurance companies, are certain to disrupt established business, but are also crucial for the market to evolve beyond its device-centric roots. Lines between many facets of the smart home market are blurring, especially for telecommunications companies and internet service providers.

“The evolution of the smart home market, and the emergence of the intelligent home, will take time, and 2019 will showcase some big steps forward,” said Jack Narcotta, Senior Industry Analyst, Strategy Analytics’ Smart Home Strategies research service.

“Less than 10 years ago many asked what the smart home market would look like,” said Bill Ablondi, Director, Strategy Analytics’ Smart Home Strategies research service. “Now, we’re identifying which companies and what marketing and technology strategies are going to win.”

Strategy Analytics’ predictions for the smart home market in 2019 are available here. Key predictions for 2019 include, among others:

Facebook entering the smart home market through its Portal video calling device

Amazon partnering with a major US home insurance provider

Apple introducing a lower-cost HomePod to expand HomeKit’s footprint

Monitoring of elderly and disabled people emerges as an important smart home service

Service providers replace individual offerings with blends of entertainment and smart home control

Etisalat Digital has entered into a strategic partnership with the Federal Electricity and Water Authority (FEWA) to provide them with ‘Etisalat Direct’. This bespoke solution is hosted and powered by Etisalat’s UAE based OneCloud and is a fully managed application that enables FEWA to connect with their customers more effectively.

Etisalat Direct allows the application to send messages (typically an SMS) directly to customers and staff. This important tool is an enabler for FEWA’s digital transformation, allowing FEWA to communicate with their customers in a reliable, fast and secure manner. As part of FEWA’s digital transformation, customer happiness and environment conservation efforts, the platform will allow FEWA to send customers links to their ebills, payment reminders, notifications, and conservation tips and guidelines. The platform also allows FEWA to communicate with their staff for internal communication.

Mohammad Saleh, Director General of FEWA, said: “This agreement is part of FEWA’s strategic objective to upgrade its services and enhance the happiness level of customers across the Northern Emirates. The selected business messaging solution will provide FEWA with a bespoke platform which has the flexibility to reach a wider audience base.”

Sultan Mohamed Al Dhaheri, General Manager, Etisalat Abu Dhabi, said: “Etisalat is proud to be the strategic enabler for FEWA’s digital transformation journey allowing them to communicate with the customers in a much efficient manner. Our business messaging solution, powered by Etisalat OneCloud, will provide a tailored experience for FEWA customers. This is in line with Etisalat’s long term strategy of driving the digital future by enabling our government partners with advanced digital solutions and services.”

During the Consumer Technology Association (CTA) State of the Industry Address at CES® 2019, CTA announced 16 out of 61 countries are leading the world in having the best environment for innovation according to its new 2019 International Innovation Scorecard.

This year’s Innovation Champions are Australia, Canada, Denmark, Estonia, Finland, Germany, Israel, Luxembourg, the Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland, the United Kingdom and the United States.

During the CTA keynote, the Netherlands’ State Secretary for Economic Affairs and Climate Policy Mona Keijzer, the U.K.’s Secretary of State for International Trade Dr. Liam Fox and Estonia’s Minister of Education and Research Mailis Reps joined Gary Shapiro, president and CEO, CTA, onstage to accept the Innovation Champion awards on behalf of their countries.

“These countries are world-class leaders in growing innovation,” said Shapiro. “When it comes to technology and policy, they value disruptive innovators. To be leaders in innovation, nations must drop protectionist rules and end barriers that limit them from creating the next great startups that will change the world for the better.”

The new Innovation Champions include first-time honorees Germany and Israel. Germany climbed into the highest tier thanks to improved new business growth and widespread access to telecommunications and online services. In Israel, over half (51.5 percent) of its workforce is employed in high-skilled jobs, almost half (46.8 percent) of its college students earn degrees in STEM fields — second only to Singapore – and 4.3 percent of its gross domestic product (GDP) goes toward research and development (R&D), more than any other country on the Scorecard.

Overall, Innovation Champions typically outperform other countries in measures of Freedom, Broadband, Entrepreneurial Activity, Resiliency – a new category to quantify the degree to which a country’s government and society are sustainable – and Self-Driving Vehicles.

Meanwhile, three former Innovation Champions dropped in the 2019 rankings. Austria’s top individual tax rate of 55 percent, the Czech Republic’s 15 percent year-over-year decline in R&D investment and Portugal’s decision to pressure short-term rental websites to share their data with the government moved them down to Innovation Leaders this year.

Other 2019 trends include:

Small countries tend to lead in R&D investment. Israel and South Korea spent the most of their GDP on R&D, with more than four percent, followed by Switzerland (3.4 percent), Sweden (3.3 percent) and Austria (3.1 percent).

On each continent, the countries with average download speeds above 18 mbps also ranked highly overall.

Eight of the 10 most resilient countries — graded on criteria including the visibility of supply chains and strength of digital and physical infrastructure — are European.

None of the 38 returning countries saw its Self-Driving Vehicles grade drop. In fact, many have further encouraged self-driving vehicle development by deploying self-driving public transit vehicles or preparing to build international test tracks. Year-over-year, we have seen more countries adopt laws allowing SDV testing.

The U.S. and China dominate in unicorns – domestic startups valued at USD 1 billion or more – created in the past decade, per 10 million people in population. The U.S. leads with 133, China has 120 and the third-ranked U.K. has 12.

CES is about showcasing the latest tech innovations, which doesn’t always correlate well with what people want. Yet this year the key gadgets seemed more aligned to the current zeitgeist.

Digital Serenity

People today seem more stressed, tired, overwhelmed and distracted than ever because we’ve added more media and choices to our lives. From brain wave radiating massage chairs to brain calming headsets to apps aiding mindfulness, there seemed to be a range of products to help us retain calmness. Brands that help us decide and navigate choice will be more important than ever.

Chinese Imagination

Historically, we’ve seen Chinese companies mirroring what was developed elsewhere, but this year we saw them offering more innovative products – TV companies like Changhong and TCL, drone makers like DJI and handset makers like Huawei seemed to have some of the most outlandish, interesting, bold and pioneering designs – proving brands need to look east for inspiration and in all sectors.

Modular Upgrades

Software can improve products overnight, but not hardware. This year we saw an array of physical add ons to enhance older devices – from parking sensors and adaptive cruise control to FIBARO which connects older devices to Z-Wave, a wireless communications tool used for home automation. Brands should think about the long-term feeling of ownership vs. what they buy once.

Assisted Living

Technology has primarily focused on the young, healthy, wealthy and curious. Changing demographics have led to more tech solutions for the fragile/vulnerable – new wearables for the elderly, an array of personal safety devices (smart canes; Hyundai’s walking car) and the rise of voice as an interface. Brands should work with technology to help solve problems faced by the many, not the lucky few.

The Gender-Equality Index identifies companies committed to advancing women in the workplace

WPP was today named an industry leader in the 2019 Bloomberg Gender-Equality Index (GEI) which recognises companies committed to transparency in gender reporting and advancing women’s equality.

Bloomberg’s 2019 index includes 230 firms from 10 sectors, headquartered across 36 countries and regions. Assessing information against a globally-established threshold, the GEI looks at how companies promote gender equality across four separate areas: company statistics, policies, community engagement and products and services.

WPP is the only company among its peers to be included in the list.

Mark Read, CEO of WPP said: “As we continue to build a culture at WPP that is inclusive, collaborative and diverse in our talent and in the work we create, we’re proud to be recognised in the Gender-Equality Index as a leader in our industry.”

Peter T. Grauer, Chairman of Bloomberg and Founding Chairman of the U.S. 30% Club said: “WPP’s GEI inclusion is a strong indicator to its employees, investors and industry peers alike that it is leading by example to advance ongoing efforts for a truly inclusive workplace.”

Four-in-five UAE consumers expect an immediate response from the organizations and vendors they contact—part of a growing demand for ‘SuperServe’ customer engagement, according to the latest global research conducted by Avaya Holdings Corp. (NYSE: AVYA) and Davies Hickman Partners.

The two companies polled 8,000 consumers across Australia, France, Germany, Italy, Saudi Arabia, Singapore, South Africa, the UAE and the UK, on their views on interacting with large organizations. The findings reveal a demand among consumers for ‘SuperServe’ organizations―those that go above and beyond typical levels of service to anticipate and act upon customer requests.

According to the report, 82% of UAE consumers believe that large organizations should make customer contact easier, compared to a global average of 79%. The report also found that UAE consumers are more demanding of SuperServe organizations, with 86% wanting an immediate response from the organizations they contact. That figure is compared to the global average of 79%.

What’s more, UAE consumers are prepared to support organizations that make interacting with them easier. 81% of those surveyed said that convenience is more important than price, compared to 63% of consumers globally, who said the same thing.

“SuperService is becoming a key demand among UAE consumers. We have conducted this research biennially since 2010, and this year’s results shows that customers will remain loyal to organizations that provide outstanding customer service, across every channel, and make communication easy,” said Fadi Hani, Vice President – Middle East, Africa and Turkey, Avaya.

“Based on this research, the path to becoming a SuperServe organization involves taking on four key considerations. The first, and most obvious, is that SuperServe organizations will provide easy and immediate responses to customer queries across any channel. Secondly, they’ll re-think the self-service model by implementing new technologies that empower customers, rather than offload work onto them. They will also augment new channels with AI and predictive analytics. Finally, SuperServe organizations will extend the stellar customer experience to the entire enterprise, meaning employees are just as empowered as the customers they’re serving.”

Certainly, the UAE consumers polled for the report expressed a desire for large organizations to adopt emerging, advanced technologies that will improve the customer experience. Over 60% said they’d like to use a smart speaker such as an Amazon Echo to access customer service, while 78% would like to use voice biometrics to bypass identification and verification questions. Those figures compare to global averages of 50% and 71% respectively.

The research also found that consumers in the UAE would be happy to deal with organizations that use AI and predictive analytics to improve the customer experience. Over four in five say they like it when organizations notice if they’re having difficulty with a process, and 59% want AI to notify them if there’s a problem with a product or service. Additionally, UAE consumers expressed trust in the algorithm; 63% want AI to make better recommendations about new products and services.

Despite this desire to interact with organizations in exciting and advanced ways, however, the report noted that voice remains a crucial part of the customer experience. Almost two-thirds of UAE consumers prefer using the phone to explain customer service problems, and 73% say they get the best answer to queries by using the phone.

“SuperServe organizations recognize the importance of high-quality human interactions, and will provide a contact center service that leverages AI to anticipate customer needs. The organizations aiming to be successful will also make it possible to provide the same great experience across every channel—be it social, chat, email or phone,” said Hani.

SuperServe companies in the UAE do, however, need to be careful around the use of personal data, if the report is anything to go by. The results show that consumers do buy more from organizations that make it easier to do business with them, but 84% worry about security when giving out credit card details over the phone. What’s more, 78% believe that large organizations are not handling their data securely.

Dubai Festival City Mall, one of the major shopping and entertainment destinations in Dubai, UAE, continues to be recognized for its exceptional family concepts and innovative marketing activities. The Mall, along with Cairo Festival City Mall, was recently honoured at the RECON Middle East & North Africa Shopping Center Awards 2018 for its ever-growing list of unique and creative activations and engaging events.

Melissa Wingfield, Regional General Manager Marketing, Al-Futtaim Malls, said, “Shoppers are at the heart of our business, and we are thrilled to be recognized for our initiatives. Each campaign we execute is designed to create exceptional experiences for our audiences and that has played a significant role in the success of our marketing strategy.”

Festival City Malls remains committed to its strategy of ‘retailtainment,’ which focuses on combining retail concepts and entertainment options to offer an immersive experience for families and provides something for every type of customer. In collaboration with its loyal and trusted partners, the malls create engaging activities that bring the retail environment to life.

Campaigns recognised include Festival of Flavors, a unique first-of-its-kind concept in the market, putting a twist on the usual food festival by providing customers with a ‘passport’ booklet of coupons and vouchers to redeem at F&B outlets throughout the mall, leading to increased footfall and sales. The Mall also launched the Festival City Kids Club, the only kids focused loyalty program in a Dubai shopping mall, which provides rewards and exclusive offers to families and children, driving shopper loyalty and further visitation. These campaigns were recognized at this year’s RECON MENA Shopping Center Awards, with Dubai Festival City Mall winning a Gold award for Advertising for the Festival of Flavours campaign, a Gold award for Digital/Social Media for the launch of Kids Club, and a Silver award for the Disney Magical Ramadan activation. Cairo Festival City Mall was a silver winner for NOI enhancement - Excellence Marketing/Sponsorship for the Coca Cola World Cup activation.

With a successful strategy and well-established retail partnerships regionally, Al-Futtaim Malls is expanding its footprint with the upcoming development, Festival Plaza, its latest community shopping project. Scheduled to open in December 2019, the project has been designed to serve as the centre for the upcoming Wasl Gate community and beyond with Dubai’s second IKEA and new concept Al-Futtaim ACE Hardware, and a planned expansion at Cairo Festival City Mall, in New Cairo

A brand logo builds a level of familiarity between the brand and the consumer. It acts as a quick, visual representation of a brand’s message and position and is often used as a tool to stir emotion and a center point for recognition. There are always two sides to the argument when it comes to evolving a brand’s image. On one side you want to show willingness to change with the times and stay contemporary, but ultimately this has to be met without making such drastic steps that you lose your identity or worse become unrecognizable to your customers.

To understand this better, the latest YouGov survey explores UAE consumers’ brand loyalty in connection to modernisation of logos and reveals the changes that consumers are receptive to.

How important is the Brand Logo?

From a list of given brand attributes including packaging, celebrity endorsements, colours, taglines etc. we found that brand logo surfaced as top when it came to overall recall of preferred brands.

Does a change in image impact loyalty?

For a considerable proportion of respondents (57%) changing the brand logo would not affect their overall brand loyalty at all. That being said, we did find a third (31%) who voiced displeasure at the element of change, with a further 12% who took a much stronger stand and claimed they would move away from the brands if they were to modify the logos at all.

Interestingly we noticed, brand loyalty seems to be stronger amongst women with 63% claiming to remain unaffected by the logo change as compared to 55% men who state the same.

How would the change be perceived?

Although a brands logo acts as a symbol of recognition for consumers, we do not see complete aversion to the idea of companies making alterations in order to evolve. Interestingly, we saw around half of the respondents agree with the fact that brands with complicated logos should simplify them and feel a logo change is required to keep up with current competitors and trends.

On the flip side of this, we do find a considerable proportion of people who may not be so open to such modifications and view logo changes negatively - either in response to lack of brand recognition or due to an overall sense that the brand would be shifting from its core values or offerings.

Dos and Don’ts of changing a logo

When given a list of brand logo elements for potential alteration, we found over a third of consumers expressed most comfort with a change in font. Editing of the symbol or colour gradient also came out as well accepted, with the changes not having an impact on their loyalty towards the brand itself.

On the other side of the spectrum, a quarter were less receptive towards brands changing the logo colour scheme entirely or adding/removing the brand name from the logo. Going further, we noticed, less than a fifth of females were closed to the idea of revamping brand logos at all.

Speaking about this, Kerry McLaren, Head of Data Services, MENA, said, “As we can see from the data findings, there is no definitive answer as to whether the evolution of a brand’s logo will be met with positive or negative acclaim. All we can take out is that brands looking to embark on this journey should consider the impact it can have and prepare accordingly. One of the key takeout would be that brands need to understand the profile of their consumers and make sure a change in direction reflects what they represent. Testing is key, so make sure you communicate with your core target audience and understand what connects them with your products and image and reflect this in any re-design.”

New subcategories also launched specifically for single posts, ads and campaigns using Snapchat.

Reflecting the fast-growing use and importance of augmented reality and virtual reality in creative marketing programs, The One Club for Creativity announced that Snapchat will now sponsor a pair of submission categories covering those areas for this year’s ADC 98th Annual Awards (http://www.adcawards.org), one of the world’s longest-running and most prestigious global competitions celebrating excellence in craft and innovation in all forms of design and advertising.

Under the new agreement, Snapchat is official sponsor of the show’s Interactive-AR/VR (http://www.adcawards.org/categories/interactive/#ar-vr) and Experiential Design-Digital Experiences (http://www.adcawards.org/categories/experiential-design#digital-experiences) categories.

In addition, The One Club has this year created new ADC Annual Awards subcategories for Snapchat single and campaign entries for posts, ads or campaigns utilizing the platform’s individual qualities and strengths (http://www.adcawards.org/categories/interactive/#social-media).

"Snapchat and The One Club share a passion for celebrating craftsmanship and creativity,” said Augie Chun,Head of US West Coast Creative Strategy at Snapchat, who is on this year’s ADC Interactive jury. “I'm excited to partner with the ADC Annual Awards on the Interactive and Experiential AR/VR categories as a way to highlight world-class Augmented Reality Lenses on Snapchat."

“AR in particular has opened the door to an exciting whole new world of creative possibilities,” said Kevin Swanepoel, CEO, The One Club for Creativity. “But what we’ve seen so far is just the tip of the iceberg, as creatives and brands continue to explore new ways to reach and captivate their target audiences. The market is ready to take off, and we couldn’t have a better partner than Snapchat to elevate and celebrate the great AR/VR creative work.”

Juries for the ADC 98th Annual Awards have just been announced. PJ Pereira, co-founder and creative chairman, Pereira O’Dell, San Francisco, CA, is chair of the Interactive jury, and Ann Harakawa, principal, Two Twelve in New York, NY and Honolulu, HI, is chair of the Experiential jury.

The ADC 98th Annual Awards are part of The One Club for Creativity, the world’s foremost non-profit organization celebrating creative excellence in advertising and design. Entries can be submitted via http://www.adcawards.org, deadline for entry is January 31, 2019.